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SCE&G files for increased electric rates
Cayce, SC, January 15, 2010...South Carolina Electric & Gas Company (SCE&G), principal subsidiary of SCANA Corporation (NYSE:SCG), today filed an application with the Public Service Commission of South Carolina (PSC) requesting a 9.52 percent overall increase in retail electric base rates. A public hearing on SCE&G's application is expected to be held by the PSC in May or early June.
"Recognizing the financial challenge that this increase will represent for many of our customers, we've asked the Commission to phase in this increase in three stages over the next 18 months," said SCE&G President Kevin Marsh. "We believe the phase-in approach balances the impact on our customers with the company's need to recover its costs."
If approved, customer rates would increase as follows:
July 15, 2010 Jan. 1, 2011 July 1, 2011
Overall increase compared to current rates 3.19% 3.06% 3.27%
• Residential customers: 3.24% 3.11% 3.33%
• Small commercial customers: 3.19% 3.07% 3.28%
• Medium commercial customers: 3.09% 2.97% 3.18%
• Large commercial/industrial customers: 3.08% 2.96% 3.16%
The monthly bill of a residential customer using 1,000 kilowatt hours of electricity would increase $3.91 in phase 1, $3.77 in phase 2 and $4.01 in phase 3.
Marsh said the company's base rate filing - its first since June 2007 - is primarily driven by the costs associated with complying with governmental regulations - particularly those related to protecting the environment.
"We are committed to conducting business in an environmentally sensitive manner," said Marsh. "However, ensuring compliance with ever-increasing governmental regulations comes with a price tag, and it's getting steeper all the time. This rate increase request is a concrete example of that fact. Our rate application reflects the recovery of expenditures of more than $700 million on federally mandated environmental and safety initiatives."
Marsh said environmental upgrades since SCE&G's last retail electric rate filing include installation of flue gas desulfurization equipment, commonly called scrubbers, to reduce sulfur dioxide (SO2) emissions at the company's two largest coal-fired plants, Wateree Station in Eastover, and Williams Station in Charleston. Marsh said the scrubbers - installed at a cost of more than $500 million - will eliminate more than 95 percent of SO2 from the two plants and an estimated 60-90 percent of mercury emissions.
He said the company also recently installed selective catalytic reduction (SCR) equipment at its Cope Station plant near Orangeburg. The equipment is expected to reduce nitrogen oxide (NOx) emissions from the plant by more than 70 percent, at a cost of more than $70 million. NOx emissions indirectly contribute to the formation of smog.
Also reflected in the rate filing is recovery of the remaining balance associated with construction of the federally-mandated Lake Murray back-up dam. The project was completed in 2005 at a total cost of nearly $329 million. To help defray the project's financial impact on customers, SCE&G elected to use synthetic fuel tax credits to help pay for construction of the backup dam. "We were able to save our customers more than $254 million by utilizing the tax credits we'd earned through investments made outside of our regulated business," said Marsh. Through today's filing, the company is seeking to recover the remaining balance of about $74.2 million.
Marsh said SCE&G's employees have remained focused on controlling costs in the face of economic upheaval. "We are cost-conscious in everything we do as we work to serve our customers safely, reliably and as efficiently as possible." he said. "Our plants consistently rank among the most efficient in the U.S."
Even as rates continue to rise, Marsh said electricity remains a good value. "If you're an SCE&G customer using 1,000 kilowatt hours a month, right now you can heat your home, refrigerate your food, run your washer and dryer, take a hot shower, watch TV, work on your computer, turn on your lights, cook your meals, and on and on -- all for around $4 a day. That's an incredible value by any measure."
PROFILE
South Carolina Electric & Gas Company is a regulated public utility engaged in the generation, transmission, distribution and sale of electricity to approximately 654,000 customers in 26 counties in the central, southern and southwestern portions of South Carolina. The company also provides natural gas service to approximately 306,000 customers in 34 counties in the state. Information about SCE&G is available on the company's web site at www.sceg.com.
SCANA Corporation, a Fortune 500 company headquartered in Cayce, South Carolina, is an energy-based holding company principally engaged, through subsidiaries, in electric and natural gas utility operations and other energy-related businesses in South Carolina, North Carolina and Georgia. Information about SCANA Corporation and its businesses is available on the Company's web site at www.scana.com.
South Carolina Electric & Gas Company
Retail Electric Rate Application
To
The Public Service Commission of South Carolina
Highlights
Filed Letter of Intent November 24, 2009
Filed Application January 15, 2010
Docket Number 2009-489-E
Test Period Twelve Months Ended September 30, 2009, As Adjusted
Requested Effective Dates July 15, 2010 Phase 1 (Requesting Increase in 3 Phases); Phase 2: January 1, 2011; Phase 3: July 1,2011
(Note: South Carolina law requires that a decision be issued no later than six months and ten days from the date of application)
Test Period Data:
Retail Electric Rate Base $4.821 Billion
Return on Rate Base 6.50%
Return on Common Equity 6.82%
Requested in Application:
Annual Revenue Increase - $ $ 197.6 Million
-% 9.52%
Return on Rate Base 9.03%
Return on Common Equity 11.60%
Capital Structure and Cost of Capital (dollars in millions):
Requested in Application (1/15/10) Currently Authorized (1/1/08)
Pro Forma
Capital Cost Weighted Capital Cost Weighted
Structure Ratio Rate Cost Structure Ratio Rate Cost
Long-Term Debt $2,790 47.04% 6.14% 2.89% $2,096 44.26% 6.23% 2.76%
Preferred Stock 115 2.42 6.41 .16
Common Equity 3,142 52.96 11.60 6.14 2,526 53.32 11.0 5.87
Total $5,932 100.00% 9.03% $4,737 100.00% 8.79%
Components of Requested Electric Revenue Increase (millions):
Environmental Projects $105.9
Normal Plant Additions 34.9
Reliability Related O&M 17.0
Taxes Other Than Income Taxes 16.5
Other 23.3
Total Requested Increase $197.6
SAFE HARBOR STATEMENT
Statements included in this press release which are not statements of historical fact are intended to be, and are hereby identified as, "forward-looking statements" for purposes of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Forward-looking statements include, but are not limited to, statements concerning key earnings drivers, customer growth, environmental regulations and expenditures, leverage ratio, projections for pension fund contributions, financing activities, access to sources of capital, impacts of the adoption of new accounting rules, estimated construction and other expenditures. In some cases, forward-looking statements can be identified by terminology such as "may," "will," "could," "should," "expects," "plans," "anticipates," "believes," "estimates," "projects," "predicts," "potential" or "continue" or the negative of these terms or other similar terminology. Readers are cautioned that any such forward-looking statements are not guarantees of future performance and involve a number of risks and uncertainties, and that actual results could differ materially from those indicated by such forward-looking statements. Important factors that could cause actual results to differ materially from those indicated by such forward-looking statements include, but are not limited to, the following: (1) the information is of a preliminary nature and may be subject to further and/or continuing review and adjustment; (2) regulatory actions, particularly changes in rate regulation and environmental regulations; (3) current and future litigation; (4) changes in the economy, especially in areas served by subsidiaries of SCANA Corporation (SCANA); (5) the impact of competition from other energy suppliers, including competition from alternate fuels in industrial interruptible markets; (6) growth opportunities for SCANA's regulated and diversified subsidiaries; (7) the results of short- and long-term financing efforts, including future prospects for obtaining access to capital markets and other sources of liquidity; (8) changes in SCANA's or its subsidiaries' accounting rules and accounting policies; (9) the effects of weather, including drought, especially in areas where the Company's generation and transmission facilities are located and in areas served by SCANA's subsidiaries; (10) payment by counterparties as and when due; (11) the results of efforts to license, site, construct and finance facilities for baseload electric generation; (12) the availability of fuels such as coal, natural gas and enriched uranium used to produce electricity; the availability of purchased power and natural gas for distribution; the level and volatility of future market prices for such fuels and purchased power; and the ability to recover the costs for such fuels and purchased power; (13) performance of SCANA's pension plan assets; (14) inflation; (15) compliance with regulations; and (16) the other risks and uncertainties described from time to time in the periodic reports filed by SCANA or South Carolina Electric & Gas Company (SCE&G) with the United States Securities and Exchange Commission (SEC). The Company disclaims any obligation to update any forward-looking statements.
Seriously? Increased electric rates?!
In August of 2009, the national average charge per kWh was $0.1040 (see http://www.neo.ne.gov/statshtml/115.htm). South Carolina's average was $0.0854. Currently, looking at my bill, we are being charged about $0.11! This is ridiculous! Now, it may not seem like a lot at first, but with the weather being what is was this past month, we were given a bill of $345 dolllars. That's a LOT, considering we live in a 1000 sq ft home, but we don't have proper insulation, so the amount of kWh isn't the thing that's bothering me. It's the fact that if we had the average rate for South Carolina, we would have saved $100 this month! And I don't know about the rest of you, but that's almost a quarter of my paycheck saved, that could have gone to groceries, or maybe even a nice family outing. And now, they want more?
These rates go along with
These rates go along with everything else in Hampton. They charge w-a-y too much. This is the reason people in Hampton County cannot succeed or get ahead. These greedy vigilantes won't to get richer at our expense and I'm tired of paying these outrageous prices. It's about time to get someone to run this town that knows the value of money instead of spending freely. They (mayor, town council) are used to spending as if it were theirs, we do not make the kind of paychecks they do. Remember all the increased pricing next election and who voted for the increases. I guarantee you the same crooks that are running this town will be in office next year. This town will never prosper because of the continued misuse of our money on our lightbills, waterbills, and taxes.
Rates & Taxes
You do realize that taxes in Hampton have been increased only one time in 17 years. By the way, the town has absolutely nothing to do with what your electric bill is. Only you and SCE&G or Palmetto Electric do. By that I mean how high YOU run your heat and how low YOU run your air and how many lights YOU leave on. SCE&G & Palmetto Electric set the rates.
The comment was that the
The comment was that the electric rates go along with everything else in Hampton County. It was not meant that the mayor or town council has dealings with increases in electric rates. Putting the light bill in the last sentence was a mistake.
I guess that I need you to
I guess that I need you to explain to me how they are "greedy vigilantes." What examples can you produce that leads you to use such a harsh term. Again, our taxes in the town of Hampton have not been raised but 1 time in 17 years and the towns credit rating is superb. Just like you, me or any other entity, they are not perfect. How are they getting rich at our expense? If you don't like they way they do things maybe you should go to a council meeting and express your concerns and if you still get no satisfaction maybe you should run for office and make a difference! Instead of name calling maybe you should try being proactive instead of reactive. No offense intended, but by working together we can all head in a positive direction. Remember these people (council & mayor)) were not appointed, they were elected by a majority and for that matter they have all been re-elected more than once mainly because the people of Hampton thought they were doing a good job.
Check Your Facts
CBH, it is always a good idea to be sure of your facts before you publish them. Twice you made the assertion that our esteemed Mayor and Council in the Town of Hampton have raised taxes only once in 17 years. Well, as they say, you could look it up…and I did. I searched my own property tax records dating back to 2001. I suppose I could have gone back 17 years but I can very easily refute your “fact” by just checking the past nine years. And to be frank, I was surprised and quite shocked by what I found. In just the past nine years council has raised property taxes a total of FOUR times. In fact, our Mayor and Council have raised property taxes a whopping 66 percent during that period. In 2001 the millage rate was 44 mils. Today the millage rate is 73 mils with an increase of two mils this past year alone. And I haven’t even mentioned water, sewer and garbage rates. In these tough economic times, our Mayor and Council should be looking at ways to hold down cost and trim the budget. With the deadline to file for Hampton Town Council approaching this afternoon, hopefully someone more fiscally responsible than this bunch will run. And while I am on the subject of fiscal responsibility, it would be great if Hampton County Council and the County Administrator would exercise some fiscal restraint as well. I won’t take the time, at this point, to discuss how much county property taxes have increased but will touch on this ill-advised notion that we need to put the extra penny on the sales tax yet again. Why don’t we finish the projects the voters agreed to under the first penny increase before even thinking about a phase two. Has there been any discussion, any movement on the Parker Building or the B.T. DeLoach building? No, the only discussion is a proposed phased two. Hampton County and the State of South Carolina are seeing unemployment rates never before seen and from appearances it is going to get worse before it gets better. Hampton Town Council and Hampton County Council all act like we are flush with money…and we are not. It is time for all them to recognize that even in the best of times the property tax burden they have put on this community makes it tough to survive and especially now is not the time to be raising taxes or even thinking about raising taxes.
jwales1972. I stand
jwales1972. I stand corrected. Your facts were dead on. I was given some bad info some time back. I also checked with the powers that be and, again, you were dead on. Have you attended a Town or County Council meeting to express your concerns? If you haven't you should!
Council Meetings No Longer On My Agenda
It is to your credit to admit you made a mistake, although the fault was not entirely your own. I can’t help but believe the source of your faulty information is a member of Hampton Town Council. And that is a problem I have with the Mayor and Council. They tell you what you want to hear and do their best to hide or shade the truth. I know it to be fact because I, along with friends and family, have been on the receiving end of their faulty information and non-action. There was a time when I was a regular at Hampton Town Council, Hampton County Council and even Hampton District One School Board meetings. But I got so disillusioned at what happened, or more often didn’t happen, that I gave up. I am especially disappointed with the way County Council and the District One School Board have done their best to distance themselves from the public. In years past, County Council welcomed public comment but under the direction of then Council Chairman Peggy Parker, the citizens were essentially muzzled. It is even worse with the District One School Board. They are so afraid of public comment and questions that they refuse to allow the public to address them and if you are lucky enough to be added to the agenda they will not respond in an open meeting. You have to wait on a carefully crafted letter from the District Office. It is truly sad that these elected officials depend on the public to get elected but then shun the public when we have questions or comments. So I guess now you can understand my reluctance to attend meetings.